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November 9, 2008
An interview with: LARRY SCOTT
THE MODERATOR: Thank you all for coming to this Sony Ericsson WTA Tour Year End press conference. With us today we have Larry Scott, Chairman and CEO of the Sony Ericsson WTA Tour.
LARRY SCOTT: Thanks very much, Aldo, and thank you all for being here and helping be part of what's been an historic year in 2008, where women's tennis keeps reaching new heights, both on the court and off the court.
It's been another year of some very significant milestones, tapped off by a very successful end of the year Sony Ericsson Championships here in Doha. The first time we've taken the Championships to this part of the world, and also the first time women have played for equal prize money in the end of year championships.
So I'm pleased to be here, side by side with our good partners at the Sony Ericsson that are as responsible as anyone for the tremendous success that women's tennis has seen over the last few years and have worked with us in step on all our plans for the road map, for bringing the Championships here, and are pushing us at every step in a positive way to continue to innovate and to be a progressive sport and be more and more attractive and relevant to our fans, both current fans and new generations of fans through the use of their technology. Like through the mobile event guide.
But beyond that, in terms of some of the stunts that they're doing, some of the promotion that they do. Even things like the 3‑D signage which you saw for the first time this week on the court. We're constantly thinking with them about ways to be more attractive to our fans and to continue to innovate.
So Sony Ericsson is very much a part of everything we do at the tour, and we continue to grow together, and it's great to hear about some of the success they're enjoying with their markets and phone sales as a result of the association.
In many respects, the Championships here in Doha is symbolic and reflective of some of the great progress that the tour has made in 2008. We've seen great competition this week. Some very compelling matches, some of our great stars performing very, very well.
And we're looking forward to a great final today between Vera and Venus Williams. Clearly two of the hottest players on the tour, and that's certainly been reflective this year of one of the most open races, I think, we've ever had for number one.
It's hard to, I don't think anyone can ever remember where we've had five players capable of being No. 1 in the world, which was the case most of the year after Justin Henin retired, it was a wide open race for much of the year until Jelena Jankovic clinched.
So the competition has never been greater. It's never been deeper, there's never been more parody at the top of the game than there is today, and that's a nice, healthy sign in terms of the competition.
Sport's never been more global than it is today. First time our Championships is here in the Middle East. The tour opened an office in Beijing, in China this year, getting ready for the first ever China Open as a preeminent tour event next year. So we continue to see growing demand from developing markets as well as great strength in our traditional markets.
And I think the success of the tournament this week and what we're doing to expand in China and other markets is a great sign of the global health and demand for the game around the world.
Equal prize money has been an important theme. Last year at our end of the year state of the union press conference, we talked about 2007 being the year of equality in women's Dennis. As that was the year that the four Grand Slams all got equal prize money. This year, the big milestone is our Championships. At $4,550,000 being equal to what the men are playing for this coming week in Shanghai. Next year, of course our four premier mandatory events at the top will also be equal prize money, $4.5 million tournaments in Indian Wells, Miami, Madrid and Beijing. So for next year, the Top 10 tournaments in tennis will be equal prize money.
I was just saying to someone earlier it was a very slow and long time coming until the Grand Slams went to equal prize money. But once it happened, now the pace and change has picked up. So I look at 2007 as sort of a tipping point. And this year, Doha reflects another big step on that path.
The heritage of women's tennis, a Pioneering spirit. Breaking barriers with the Championships here in Doha, reflective of another barrier broken. One earlier in the year as well when Shahar Peer was the first Israeli player to play here in a tournament in the Arab world. So we're very proud of that.
We're also proud of the fact that Billie Jean King, the founder of the WTA Tour, a real pioneer in her own right for women's tennis, for women's sports, and our women's causes, continues to be an important influence for us. And she was here to be part of the expansion of the Sony Ericsson WTA Tour/UNESCO partnership for gender equality, which we were thrilled. We could use Doha as a platform to announce.
So having Billie Jean here has been very meaningful for us, and hopefully symbolic of the great progress that is being made around the world toward gender equality. And the role that sport is playing in women's tennis is playing on that March.
We've seen a lot of promotion around this event and around the world. We've seen an unprecedented level of promotion. This was the year of the launch of the largest ever global marketing campaign in women's tennis ‑ Looking For a Hero. You saw television commercials, print and digital campaign, a lot of other profession during the year.
This is reflective of financial success and growth of the tour in and vesting back and continuing to try to bring in new audiences and create more excitement and more following and build the TV audiences, build the fan base through advertising and promotion. So that was quite a big milestone for us as well.
So as I look back, a lot has happened on the court this year, and off the court. And I always like using these opportunities as we look back to also look forward.
Just as I'm getting ready to catch my breath on 2008, I realize that next year will be a lot going on as well. It will be pretty exhausting, because the prelaunch of the tour, dubbed road map 2009 kicks in next year. So I think we're going to be sitting here at the end of next year, reflecting back on 2009, saying that that was really a milestone in 2009, the formatting of the tour calendar.
As many of you know, it's been many years in development. About four years we've spent on designing, enhancements and changes to the tour calendar and player commitment, and it's finally upon us. January 1, 2009 is right in front of our nose, and you're going to see the most dramatic reforms in women's tennis calendar that you've ever seen.
All designed around three core principles: A healthier calendar for the players, through a shorter season and longer off‑season. This event will be ending, will be taking place the last week of October next year. Reduced player commitments for the athletes, so they'll be playing less next year, less required matches by the tour, and we've repositioned a lot of tournaments, so there's less surface changes, and more logical geographic flow.
The second thrust of our changes next year is increased prize money. Reflecting the global growth and demand for women's tennis. Prize money is going up from $71 million this year, to over $85 million next year. A 20% prize money increase year on year. And that is an immediate response to the proof product that we're going to be able to deliver next year.
And thirdly, we'll have a more marketable, clearer presentation to the public, and we think a more compelling platform with 20 premier events average order by our four combined, mandatory events at Indian Wells, Sony Ericsson in Miami, and Madrid and Beijing. The idea being we want our fans to see the best athletes playing against each other more often, on big stages, and the athletes being healthy and being able to play their best for the fans, and having more break in between.
So there is a lot of detail behind it. We were able to go into that detail at a US Open press conference, that many of you attended, and those of you that couldn't be there, we've got a pretty thick pack detailing all the changes.
So given that our final is going to start soon, I won't go into more detail about the road map now. But I did want to leave time for questions that anyone has for Aldo or myself regarding 2008 or forward looking for 2009.
Q. We've kind of heard rumors that players were still talking about the road map, and wondered if there had been any last moment tweaking or changings or alterations in the road map?
LARRY SCOTT: Most of the elements of the road map have been set for the last 18 months, but as we're getting closer to 2009, we've been detailing how the rules are going to work, schedules, et cetera.
There were several concerns expressed by our top players over the last few weeks as we started sitting down with them doing their individual schedules. Their concerns related to two issues, primarily. One, a concern that there wasn't enough break between some of our big tournaments, which were back‑to‑back, primarily players playing in Rome right up against Madrid next year.
Rome is a 56‑draw tournament followed by Madrid which is a 64‑draw tournament on Saturday. Similarly in the fall, Tokyo is a 56‑draw tournament followed by Beijing, which is a 64‑draw tournament. Those tournaments overlapped very closely. Players were concerned it was too many matches in too few days.
And while there are so many great things about the schedule next year which the players thought would be healthier, they didn't think this would be consistent with that. They thought it was too intensive, could lead to injury, could lead to them not being prepared for Roland Garros in the case of Rome, Madrid.
That was one issue. On the second issue, there was concern that given some of our rules, players might be denied entry into some of what we call our Premier 700 tournaments. So as has been the hallmark of our process, it's been very transparent, consultative process that have really engaged the members in, and that's why it's taken so long to develop.
We have been talking to the players about those issues. In fact, after the draw ceremony on Sunday, that many of you were at, we had a meeting. Everyone of the top players attended, their agents were there, the coaches, even had a parent or two at the meeting, and I was able to listen to their concerns and brain storm some possible solutions.
Some had some of our board members there. We then hadn't finished our board meetings yet. I had more board here in Doha for our meetings. We spent time working on some of those issues, and pleased to say we have found some solutions to those and sort of tweaked a couple of technical details about how our system will work that, I think, will appease some of the concerns the players have had. But will still balance what we're trying to achieve in those areas.
Specifically, what we've agreed is that we are going to award four byes to the semifinalists in Rome, into the Madrid tournament, and four byes to the semifinalists from Tokyo into the Beijing tournament. Therefore, for those players that have to play the most matches in Rome and Tokyo respectively, they can start later and have one less match in a subsequent event.
So players are very happy with that solution, and the tournaments affected Madrid and Beijing respectively are happy with it, too. So that's how we've resolved that issue.
On the second issue, the 700 issue, we've made some adjustments so that none of the top players that were concerned about being denied entry into the so‑called previous 700 tournaments next year. Which, for those of you that may not understand what I'm talking about, the previous 700 tournaments, are Paris, Charleston, Stuttgart, Stanford, and L.A., we've removed the prohibition on players being able to get into those two tournaments. The restrictions, I should say, of players being able to get into the two tournaments of their choice. And every player will be able to play at least two of those.
So I could give you more, if you're interested, more detail about exactly how the rules work, but I'm pleased to be here today saying we've been able to resolve the final two issues that players have had concerns about regarding next year.
As you can see from my description which may be hard to follow for some of you that haven't followed the technical details, there have really been some technical details about how the system works. The principles of the road map, the players are thrilled about, and are very much looking forward to it.
Q. Is it implicit in the road map that you hope some players will extend their careers further?
LARRY SCOTT: Long‑term, yes. Short term, our concerns have been the number of injuries and withdrawals. Concern about the player health and well being, over the last few years it seems every year we have players that suffer long‑term injuries and they're off the tour for a while or can't compete at their best. We don't think that's good for players nor good for fans nor good for the tournaments and their sponsors and TV that are making the investments.
So that is the short term. I said it won't happen overnight, sport is sport, and a lot of players on the tour have been playing under a certain system and maybe playing too much over the last few years. So I don't think anything magical is going to happen overnight.
But I'm very confident that the changes we've made with the consultation from our medical advisors is a much healthier schedule, and short‑term, it will alleviate some of the grueling nature of the tour, which is a very long season, very intensive and a lot of travel, and a much healthier schedule.
But I think the mid to long‑term benefits will be for the next generation of players that comes along, and from their beginnings on the tour have a healthier schedule. Hopefully those players will have more career longevity.
Q. Are there any clear patterns that medical advisors have suggested that is causing injuries?
LARRY SCOTT: There are several things. They very much focus on how much downtime the players have at the end of the season for really long rest and recovery. They've also advised us to reduce the number of tournaments that players play to promote something called periodization. Which is make sure the players are able to play, rest for a couple of weeks, play, rest for a couple of weeks. They get concerned when they see players playing many, many weeks in a row and not taking breaks.
Thirdly, they advised us not to require players to ever have to play three tournaments in a row. That we should think of at the requirements we place on the player as being in pods of no more than two tournaments.
The fourth element was really advised us to try to minimize surface changes during the year. Players going from the hot summer in Australia, to cold indoor in Asia, to outdoors in the Middle East, back to indoors in Europe. It's a surface changes that are contributing factor to stress on the muscles and joints as the body adjusts to different conditions.
So you'll see on the calendar next year, less of those very drastic changes in conditions and climate and things like that. So it's a lot of little things. There is no silver bullet, otherwise someone would have thought of it a long time ago. But it's a lot of little things and just trying to make the smartest moves you can.
We've had to make some tough choices in reducing the calendar, not an easy thing to do. So I feel good we've made the hard choice that's need to be made to do the best we can with the limitations we have.
Q. You mentioned the take in prize money from $71 U.S. to $85 million U.S., that at a time when the world is suffering financially. Does that put out a message that tennis in general, women's tennis in particular is in a healthy financial state?
LARRY SCOTT: I certainly think it does, yes. We've got a long list of cities, that you know from our prior conversation and about Abu Dhabi and others, there are a long list of cities that want to be on the tour. We've never had a longer waiting list for cities that want to be on the tour than we have right now.
There are ten cities around the world that are quite frustrated with us because we don't have a spot for them on the tour.
When we did the road map application process in the beginning of 2007, we were oversubscribed and couldn't accommodate everyone. So I think there are a lot of healthy signs out there in terms of where women's tennis is at.
Having said that, I think we're all keeping a careful watch about the world economy, and no one is complacent about it, that's for sure.
Q. Is the extra money coming from existing sponsors or new ones?
LARRY SCOTT: This increase in prize money is coming from tournaments, in many cases, having to or offering to raise their prize money levels. Tournaments generate their money from three primary sources: Sponsorship, ticket sales, and television to a lesser degree. But it's primarily from ticket buyer and from sponsors.
Q. I would like to know which is exactly your idea about the future? I mean, what you have exactly in mind, and I don't know if you will be able to do it. I understand there are so many forces, so many different interests, and you are looking for a circuit like Formula 1, one biggest tournament each month, like looks like we are going there. Four Grand Slams, four combined events, looks like this. And in this case you don't think it's time to stop this prize money increase? Because looks like it's impossible to prize money which is less by $1 million Euro or dollars, whatever you want. So much. You don't think it's time to give a different meaning to win a big tournament like that when you beat 65 peoples or 100 and then 28? It's not the time to educate in different way? Because now, you know, they are not winning $100,000, they are winning $1 million. So it's not the time now to do different things in philosophy way just to change a little bit? Maybe in this way we can have more people retiring everywhere? Maybe we are more moral situation, which I see every day in the media. Because me and you we are convinced about enduring a Grand Slam tournament Serena Williams will be playing still, and, you know. You understand?
LARRY SCOTT: I think so. Maybe the second question first about the prize money issue. We're a sport but also entertainment. To me, my job is about maximizing the benefit for our members which are players and tournaments. So I think that's our vision is to make professional women's tennis as popular as possible and enriching a career in business as possible for our members. That's our mission. It's very clear. We obviously do that by balancing a lot of different things, a healthy, logical calendar, being in the right markets at the right time of year, with the fact that our members want to see our sport grow and be competitive with other sports.
So I get put under a lot of pressure by our members to balance the best interest of the sport with commercially optimizing our circuit through our revenues and having them increase what they earn from the sport.
So our mission is very clear in that regard. We try to balance a lot of different forces, and a lot of different issues like a lot of institutions would.
In terms of vision for the sport, really, the road map is the culmination of a visioning process that we went through. But it's a practical and realistic vision. It's not a vision that says if we could start with a blank piece of paper where would you put the Grand Slams or how many Grand Slams would you have or things like that. Because I've been around tennis long enough to realize that there are different governing bodies in the sport, and we have to respect the role of Davis Cup and Fed Cup, and the role of the individual sovereignty of the Grand Slams to set their schedule.
So we have to partner, and we have to work around what's already there, and the institutions in the sport.
So we take those as givens, and given the Grand Slams are where they are. Given they're team competitions and there is an Olympics, what can we do to maximize women's tennis for the benefit of everybody.
So if you asked me what my ideal would be, to tear up the piece of paper and start over with one governing body for the sport that could make all the decisions. But that's not the case.
I think the road map represents a bold step, and vision for women's tennis that the marketplace is responding to. I think there is a lot of excitement from our members, players and tournaments, but also commercial partners about what we're doing. We think this really is going to help women's tennis get to the next level. I hope that answers your question.
Q. Prize money's not too big?
LARRY SCOTT: No, it's reflective of the market. If the money is not there, then the prize money wouldn't go up. But it's there.
Q. If I can come down from such lofty levels to a technical detail?
LARRY SCOTT: Thank you (laughing).
Q. I'm not quite sure about this byes into the big events. If you do a draw based on your ranking and you've got the very last moment two semifinalist who's aren't even in the Top 16, how are you technically going to do a draw?
LARRY SCOTT: You'll have 60 spots in the draw rather than 64. So when you pull, you see who the four semifinalists in Rome, for example, which is on a Thursday, you'll know Thursday evening in Rome who the four semifinalists are, you can then do the main draw on Friday, and you pull the 60 spots, including the seeds, minus the four spots. You'll pull 60 spots, and leave the four.
Q. So someone who would be expecting to be seeded, might not get seeded? Expected to be seeded on their ranking might not get seeded?
LARRY SCOTT: It actually doesn't change the seeding at all because the seeds aren't getting byes. So it is a novel ‑‑ I know it is an out of the box, creative solution to an issue.
It's a departure of how we've always thought about byes. We've always thought about byes as something players earn by their ranking. With Madrid, we started by saying there are no byes for seeds. It's a 64‑draw starting on a Saturday. That's going to be one of the magic benefits and aspects of that Madrid tournament and our Beijing tournament.
You're going to have a first weekend, like you enjoy at Indian Wells and Miami, every one of the top players in the world is going to be playing on that first Saturday and Sunday. And when I say more marketable product when I talk about the things on the road map, this is something we've never had before. A guaranteed to our fans, sponsors, TV broadcasters that at these tournaments you're going to have every one of the top players in the world playing that weekend. And the TV audience comes out, fans, sponsors, it's going to do a lot to help the popularity of those two magic weekends, if you will.
That's where we started from. The top players said hang on. If we're doing well in Rome, and I've got to play a Friday night semifinal in Rome, and I've got to play on Saturday or Sunday, and play Sunday in Madrid. That's not consistent, Larry, with a healthier situation on the calendar, especially leading up to Roland Garros. And I can say, you're right. That is something that probably isn't consistent, let us rethink that.
So the top players would have liked the byes to be based on seeding, of course. But they couldn't argue, really when we came back and said your concern is just too many matches in that two‑week period. Potentially 11 matches in 14 days, so it really should go to the players that are playing the matches. But if you lose first round in Rome, you don't need a bye into Madrid.